Page 148 - SAIT Compendium 2016 Volume1

s 12J INCOME TAX ACT 58 OF 1962 s 12K
[Para. (c) deleted by s. 38 (1) (l) of Act 24 of 2011 – date of commencement 1 January 2012. The deletion applies in respect of years of assessment commencing on or after that date.]
(d) . . .
[Para. (d) deleted by s. 38 (1) (l) of Act 24 of 2011 – date of commencement 1 January 2012. The deletion applies
in respect of years of assessment commencing on or after that date.]
(e) the tax affairs of the company are in order and the company has complied with all the relevant provisions of the laws administered by the Commissioner; and
(f) . . .
[Para. (f) deleted by s. 38 (1) (l) of Act 24 of 2011 – date of
commencement 1 January 2012. The deletion applies in respect of years of assessment commencing on or after that date.]
(g) the company is licensed in terms of section 7 of the Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002).
[Sub-s. (5) substituted by s. 25 (1) (e) of Act 17 of 2009.] (6) If the Commissioner is satis ed that any venture capital company approved in terms of subsection (5) has during a year of assessment failed to comply with the provisions of that subsection, the Commissioner must, after due notice to the company withdraw that approval from the commencement of that year if corrective steps acceptable to the Commissioner are not taken by the
company within a period stated in that notice.
[Sub-s. (6) substituted by s. 25 (1) (f) of Act 17 of 2009 and by s. 38 (1) (m) of Act 24 of 2011 – date of commencement 1 January 2012. The substituted subsection applies in respect of years of assessment commencing on or after that date.]
(6A) If, at the end of any year of assessment, after the expiry of a period of 36 months commencing on the rst date of the issue of venture capital shares—
[Words preceding para. (b) substituted by s. 23 (1) (b) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(a) . . .
[Para. (a) deleted by s. 38 (1) (n) of Act 24 of 2011 – date of commencement 1 January 2012. The deletion applies
in respect of years of assessment commencing on or after that date.]
(b) less than 80 per cent of the expenditure incurred by the company to acquire assets held by the company was incurred to acquire qualifying shares issued to the company by qualifying companies, each of which, immediately after the issue, held assets with a book value not exceeding—
[Words in para. (b) preceding sub-para. (i) substituted by s. 23 (1) (a) of Taxation Laws Amendment Act, 2015 (‘at least 80 per cent’ replaced by ‘less than 80 per cent’) – date of commencement deemed to have been 1 January 2015.]
(i) R500 million, where the qualifying company was a junior mining company; or
[Sub-para. (i) substituted by s. 38 (1) (o) of Act 24 of 2011 (date of commencement 1 January 2012; the substituted subparagraph applies in respect of years of assessment commencing on or after that date) and by s. 23 (1) (c) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(ii) R50 million, where the qualifying company was a company other than a junior mining company; or [Para. (b) amended by s. 38 (1) (o) of Act 24 of 2011 (date
of commencement: 1 January 2012) and substituted by s. 23 (1) (c) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(c) more than 20 per cent of any amounts received in respect of the issue of shares in the company was
utilised to acquire qualifying shares issued to the
company by any one qualifying company,
[Para. (c) substituted by s. 38 (1) (p) of Act 24 of 2011 (date of commencement: 1 January 2012 – the substituted paragraph applies iro years of assessment commencing on or after that date), by s. 23 (1) (d) of Act 43 of 2014 (date of commencement: 1 January 2015) and by s. 23 (1) (b) of Taxation Laws Amendment Act, 2015 (‘no more than 20 per cent’ replaced by ‘more than 20 per cent’) – date of commencement deemed to have been 1 January 2015.]
the Commissioner must after due notice to the company withdraw that approval with effect from the date of approval by the Commissioner of that company as a venture capital company if corrective steps acceptable to the Commissioner are not taken by the company within a period stated in the notice.
[Sub-s. (6A) inserted by s. 25 (1) (g) of Act 17 of 2009.]
(7) A company may apply for approval in terms of subsection (5) in respect of the year of assessment following the year of assessment during which approval was withdrawn in respect of that company in terms of subsection (6) or (6A) if the non-compliance which resulted in the withdrawal has been recti ed to the satisfaction of the Commissioner.
[Sub-s. (7) substituted by s. 25 (1) (h) of Act 17 of 2009.] (8) If the Commissioner withdraws the approval of a company in terms of subsection (6) or (6A), an amount equal to 125 per cent of the expenditure incurred by any person for the issue of shares held in the company must be included in the income of the company in the year of assessment in which the approval is withdrawn by the
Commissioner.
[Sub-s. (8) substituted by s. 25 (1) (h) of Act 17 of 2009.] (9) Notwithstanding section 8 (4), no amount shall be recovered or recouped in respect of the disposal of a venture capital share if that share has been held by the
taxpayer for a period longer than ve years.
[Sub-s. (9) deleted by s. 271 of Act 28 of 2011 (date of commencement: 1 October 2012) and inserted by
s. 23 (1) (e) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(10) A venture capital company must submit to the Minister a report providing the Minister with the information that the Minister may prescribe.
(11) No deduction shall be allowed under this section in respect of shares acquired after 30 June 2021.
[S. 12J inserted by s. 27 (1) of Act 60 of 2008.]
12K Exemption of certi ed emission reductions
(1) For the purposes of this section—
‘certi ed emission reduction’ means a certi ed emission reduction as de ned in paragraph 1 (b) of the Modalities;
‘Clean Development Mechanism project’ means a CDM Project as de ned in regulation 1 of the Regulations; ‘Designated National Authority’ means the DNA as de ned in regulation 1 of the Regulations and designated
in regulation 2 of the Regulations;
‘Kyoto Protocol’ means the Protocol to the United
Nations Framework Convention on Climate Change adopted at the third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto, Japan, on 11 December 1997;
‘Modalities’ means the Modalities and procedures for a clean development mechanism as contained in the Annex to Decision 3/CMP.1 in Part Two of the Addendum to the Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on
140 SAIT CompendIum oF TAx LegISLATIon VoLume 1